Pakistan signals bidding for gas pipeline

Islamabad signed an agreement with Iran in June to move ahead with a gas pipeline stretching from the South Pars gas field in Iran.

Pakistani Prime Minister Yousuf Raza Gilani said during a meeting with his Italian counterpart Franco Frattini that a bidding round for the gas pipeline was expected shortly, the official Kuwait News Agency reports.

The press agency, KUNA, reported that Italian oil and gas company ENI is competing for the project with the support of the Italian government.

Islamabad is struggling to stave off a looming energy crisis by courting its Asian partners for more natural gas deliveries.

First deliveries of natural gas through the pipeline are expected in Pakistan by 2015. Islamabad has contracted 750,000 cubic feet of gas per day through the pipeline under the terms of the 25-year deal.

Iran started construction on the pipeline in its territory using domestic engineering companies. Tehran said if the pipeline reaches India as originally planned, Bangladesh could link to the gas line from there.

India was included in the initial plans for the project but stayed on the sidelines since 2008 because of pricing issues with Iran and concerns over the security of the pipeline through Pakistan.